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Wolfowitz flies into World Bank storm

THE cerebral Pentagon hawk Paul Wolfowitz, who has been nominated to head the World Bank, will be warned this week that a financial scandal is brewing at the world’s largest development agency over allegations of serious irregularities in its internal accounts.

A congressional investigation has been launched into allegations that bank staff covered up accounting problems that encouraged “a culture of corruption” at the bank. Members of staff who reported accounting errors involving tens of millions of dollars also claim to have been punished for coming forward.

The new investigation by Congress’s joint economic committee follows a long-running inquiry by the Senate foreign relations committee into widespread allegations of corruption in the management of the bank’s development projects in many Third World countries.

At a hearing last year, Senator Richard Lugar, an Indiana Republican, ignited a political storm by citing academic estimates that more than $100 billion (£52 billion) had